CARICOM Heads Express Bitter Disappointment Over EU Decision On Sugar

(CARICOM Secretariat, Turkeyen, Greater Georgetown) The Heads of Government of the Caribbean Community (CARICOM) in Malta for the Commonwealth Heads of Government Meeting were alarmed at learning that the EU has taken the decision to drastically reduce by 36%the price that ACP states will receive for their sugar exports to the EU.

The Heads of Government were bitterly disappointed that despite their continuous submissions to the EU regarding the disastrous consequences which such a drastic price cut over such a short period would have on their vulnerable economies and societies, and the many assurances by the EU at various levels to address such concerns, the EU has patently failed so to do.

Furthermore, Heads were nonplussed that the EU, having recognised the importance of providing adequate resources for compensation and adjustment to their own producers – approximately six billion Euros, representing “on average 64.2 percent of the price cut”,- has so far allocated a paltry Euros 40 million for 2006 for the entire ACP group of sugar producing states.

This decision is seen by the CARICOM Heads of Government as a clear breach of faith which is certain to worsen rather than alleviate poverty in their countries, create social dislocation, increase vulnerability and in no way advance the achievement of the Millennium Development Goals, all objectives to which the EU claims to be committed.

Moreover, the decision breaches the very principle of partnership and introduces great uncertainty into the letter and spirit of the Sugar Protocol – a legally binding relationship “of indefinite duration”. Specifically, the decision runs counter to the very commitments set out in Article 36 (4) of the ACP-EU Cotonou Agreement which commits that any review of the Sugar Protocol would be undertaken “with a view to safeguarding the benefits therefrom.”

This decision of the EU on Sugar comes on top of the damage caused to many Caribbean and other ACP Banana producing countries by the changes made earlier to the ACP-EU Banana Protocol. Worst yet, some Caribbean countries are victims of both. The affected countries are ALL in need of urgent assistance, especially St Kitts and Nevis whose sugar industry was closed in July this year.

This pattern in the EU-Caribbean relationship does not augur well for future trade agreements and, coming as it does on the eve of the Hong Kong Doha Ministerial Meeting in December, raises troubling questions about the reliability of any commitments to and agreements emerging therefrom.

CARICOM Heads of Government therefore –

• call on the EU, even at this late hour, to observe the letter and spirit of the ACP-EU Agreements;
• remind the EU that at the time of the signing of the Sugar Protocol, the ACP States accepted a price less than half the then ruling world market price, in the spirit of a long-term commercial agreement;
• stress the severe social and economic fallout in Caribbean and other ACP states which the implementation of the EU decision would entail;
• draw attention to the compensation made by the EU for its own sugar producers; and
• against all the above, urge the EU to re-consider its decision, and agree in consultation with the ACP to adequate arrangements for ACP suppliers who have faithfully over more than quarter of a century been reliable suppliers of sugar to the European Union.